September 1, 2015 / 8:36 AM / 2 years ago

UK mortgage approvals rise in July to highest level since Feb 2014

LONDON, (Reuters) - British mortgage approvals rose in July to hit their highest level since February 2014, Bank of England data showed on Tuesday, adding to signs Britain’s housing market is regaining momentum.

The BoE figures also showed lending to consumers continued to increase at a solid pace.

Mortgage approvals for house purchases numbered 68,764 in July, stronger than expected in a Reuters poll of economists, from 67,069 in June.

Tighter rules on mortgage lending took effect last year, requiring banks and building societies to make more rigorous checks on whether borrowers can afford their loans.

The number of approvals fell throughout most of 2014, cooling house price growth and easing concerns about a bubble in the housing market.

But Tuesday’s figures add to signs the housing market is heating up again. Mortgage approvals have risen in five of the last seven months and the pace of price rises has picked up.

Net mortgage lending, which lags approvals, surged by 2.709 billion pounds in July, the biggest increase since July 2008.

The BoE said consumer credit grew by 1.173 billion pounds in July, down slightly from a 1.23 billion pound rise in June. But it was up 7.5 percent on an annual basis -- the biggest such increase since April 2006.

Despite only weak rises in wages for much of the past five years, Britain’s economic recovery is still heavily reliant on spending by households.

The BoE said lending to non-financial businesses rose 734 million pounds, after a 5.48 billion pound dip in June.

(Reporting by Andy Bruce and Ana Nicolaci Da Costa), +44 20 7542 5109

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